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| 1.   | Effective      January 1, 2008, the UG-CSA is amended by deleting the following language      in Section 8.2 “Mining and Reclamation Component” (A) “Base CIE Amount”      (1)(i) “Capital True UpAdjustment”: |
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| 2.   | Effective      January 1, 2008, the UG-CSA is amended by deleting the following language      in Section 8.2 “Mining and Reclamation Component” (A) “Base CIE Amount”      (1)(i) “Tax and DepletionAdjustment”: |
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| 3.   | Effective      January 1, 2007, the UG-CSA is amended by deleting the following paragraph      in Exhibit F “Operating Costs” Section A “Rentals and      Royalties”: |
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| 4.   | Effective      January 1, 2007, the UG-CSA is amended by inserting the following language      at the end of Exhibit F “OperatingCosts”: |
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|   | J. | All      costs that SJCC incurs to resolve actual or potential claims that arise      due to oil and gas interests on lands within the Coal Leases that may      limit, in SJCCs reasonable judgment, SJCC’s ability to perform its      obligations under the UG-CSA.  Such costs include, without      limitation, payments to, and funding arrangements with, oil and gas lease      interest-holders to resolve suchclaims. |
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|   | K. | Any      cash proceeds or cash value of marketable instruments, such as      environmental allowances, received by SJCC from the collection, disposal,      processing, sale or management of gas from the Coal Leases from the point      such gas is removed from the mine due to activity SJCC undertakes that is      not applied against payments and funding arrangements as provided in      Exhibit F Paragraph J shall be credited against cost of collection      activity billed to Utilities.  In the event that SJCC invests      capital for the collection, disposal, processing, sale or management of      gas from the Coal Leases and receives cash proceeds or cash value of      marketable instruments such as environmental allowances, the Parties shall      refer that matter to the Joint Committee to determine whether, in light of      the Operating Costs reimbursed by the Utilities and the capital investment      of SJCC with respect to those gas collection, disposal, processing, sale      or management activities, all or any portion of such proceeds shall be      credited against cost of collection activity billed to      Utilities.  Notwithstanding the foregoing, income tax credits      received by SJCC shall not be credited against cost of collection activity      billed to Utilities. |
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| 5.   | Effective      January 1, 2007 the UG-CSA is amended by deleting the following paragraph      in Exhibit F “Operating Costs” Section H “Legal Fees and      Expense”: |
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| 6.   | Effective      January 1, 2007 the UG-CSA is amended by inserting the following paragraph      at the end of Section 7.1 “Mining Plans and Methods” of the      UG-CSA: |
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|   | C) | Activity      that SJCC undertakes in SJCC’s reasonable judgment, beyond venting, to      collect, dispose, process, sell and otherwise manage gas from the point      such gas is removed from the mine to mitigate its environmental impact is      work under this Agreement. |
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| 7.   | Effective      January 1, 2008, the UG-CSA is amended by deleting the following language      in Exhibit F “Operating Costs” ParagraphJ: |
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| 8.   | Effective      January 1, 2008, Section 6.4 “Waste Disposal Area” of the UG-CSA is      amended by deleting the followingparagraph: |
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| 9.   | Effective      when it is approved by the United States Bureau of Land Management, the      second modification to Federal Coal Lease NM 28093 (“NM 28093 Mod 2”) is      hereby added to the Coal Leases.  Specifically, the UG-CSA is      amended by adding the following coal lease description to Exhibit “A”      “Coal Leases”: |
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| 10.   | Effective      January 1, 2007, Section 10.3 “Authority” of the UG-CSA is amended by      adding the following paragraph: |
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|   | H) | SJCC      shall not extend mining operations into Section 6, Township 29 North,      Range 14 West NMPM, unless the Joint Committee passes a resolution      approving mining in Section 6, Township 29 North, Range 14 West NMPM,      before February 28, 2009.  The decision of any Party not to      consent to such a resolution shall not be subject to challenge, by      arbitration or otherwise. |
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| 11.   | Effective      January 1, 2007, the UG-CSA is amended by inserting the following language      at the end of Exhibit F “OperatingCosts”: |
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|   | 1. | Costs      incurred to address surface facility and property ownership including but      not limited to purchase, damage mitigation payments, alternative      arrangement payments, area clean up costs, cost to dispose of unwanted      items, and compensation payments for loss of use or inconvenience of      property interests in Section 6, Township 29 North, Range 14 West N.M.P.M.      and Section 1, Township 29 North, Range 15 West  N.M.P.M. |
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|   | 2. | SJCC      will credit against Operating Costs any value realized due to the disposal      of any assets acquired to address surface facility and property ownership      in Section 6, Township 29 North, Range 14 West, NMPM, and Section 1,      Township 29 North, Range 15 West, NMPM, to the Utilities.  If      SJCC incurs a penalty, as described in Exhibit F Section L (3), the credit      above will be reduced by an amount equal to the total salvage value      multiplied by the SJCC penalty amount ([ * ] of the amount of actual costs      that exceed the high estimate for the costs in the penalty-incentive cost      pool described below) divided by the total actual cost incurred in the      penalty-incentive cost pool.  All values adjusted for      inflation. |
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|   | 3. | For      the District 300 extension area in Section 6, Township 29 North, Range 14      West N.M.P.M. and Section 1 Township 29 North, Range 15 West N.M.P.M.,      SJCC may earn an incentive, which is an amount to be added to operating      costs, or incur a penalty, which is a reduction factor applied to certain      operating costs as described below: |
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|   | 4. | Due      to the unique circumstances the Parties shall use the following inflation      adjustments for purposes of Exhibit F, Paragraph L only: The deflator used      for making inflation adjustments to the District 300 surface rights      portion of the penalty-incentive cost pool targets and actual costs will      be line 11 of Bureau of Economic Analysis Table 1.1.9, Gross Private      Domestic Investment, Residential.  All other penalty-incentive      cost pool targets and actual costs incurred will use line 1 of Table      1.1.9, Gross Domestic Product Implicit Price Deflator.  The base      deflator for all penalty-incentive cost pool targets of Exhibit F,      Paragraph L.3.c shall be the first quarter 2007 and, for actual costs      incurred, shall be the quarter in which such cost was      incurred. |
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| 12.   | In      consideration for the other terms and conditions of this Amendment and      Joint Committee Resolution Number 4, including the credits and invoicing      agreements described, which are full and final satisfaction of disputes      about costs incurred: (a) to fund arrangements to extinguish actual or      potential claims that arise due to oil and gas interests on lands within      the Coal Leases; (b) in permitting and regulatory compliance activities      necessitated by oil and gas leases and associated activities; (c) for fees      and related costs incurred by attorneys in attempting to resolve oil and      gas lease and associated development conflicts; (d) to collect, dispose,      process, sell and otherwise manage gas from the point such gas is removed      from the mine to mitigate its environmental impact prior to December 31,      2007, the Utilities and SJCC each hereby withdraw any and all claims      concerning whether Utilities have an obligation to reimburse or otherwise      make payment to SJCC for these costs.  Each hereby releases and      forever discharges the other from any and all claims, potential claims,      obligations and liabilities of any kind or character of whatever nature,      whether known or unknown, suspected or unsuspected, direct or indirect,      which arose at any time before December 31, 2007 in connection with these      costs. |
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| 13.   | The      Parties have reached agreement on the Capital True Up Adjustment and the      values for NPVD, NPVC, and Moriginal.  Therefore,      the Parties agree that the CTUA is hereby terminated.  This      provision constitutes the Notice of Termination provided for in CTUA      Section 1.1(A). |
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| 14.   | Capitalized      terms used herein shall have the meaning defined herein or in the      UG-CSA. |
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| 15.   | All      other provisions of the UG-CSA not specifically amended by this Amendment      Five remain in full force and effect.  This Amendment Five shall      be effective in accordance with its terms upon execution by all      Parties. |
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| By:           /s/      John Myers     |   |                                                                                                                                              |
|----------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------|
| Name:      John      Myers                                     |   |                                                                                                                                              |
| Title:        V.P.      Power Production             |   | Date:                      12/18/07 |
|                                                                                         |   |                                                                                                                                              |
|                                                                                         |   |                                                                                                                                              |
| Tucson      Electric Power Company                                                           |   |                                                                                                                                              |
|                                                                                         |   |                                                                                                                                              |
|                                                                                         |   |                                                                                                                                              |
|                                                                                         |   |                                                                                                                                              |
| By:           /s/      David Hutchens |   |                                                                                                                                              |
| Name:      David      Hutchens                                 |   |                                                                                                                                              |
| Title:             Vice President                         |   | Date:                      12/19/07 |
|                                                                                         |   |                                                                                                                                              |
|                                                                                         |   |                                                                                                                                              |
| San      Juan Coal Company                                                                   |   |                                                                                                                                              |
|                                                                                         |   |                                                                                                                                              |
|                                                                                         |   |                                                                                                                                              |
|                                                                                         |   |                                                                                                                                              |
| By:           /s/      Evan Y. Jones  |   |                                                                                                                                              |
| Name:      Evan      Y. Jones                                  |   |                                                                                                                                              |
| Title:        V.P.      SJCC                         |   | Date:                      12/21/07 |

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